This presentation defines strategic management and examines different models of strategic management structures within organizations. It begins by defining strategic management as the part of an organization that transforms scarce resources, uncertain futures, and complex environments into clear, attainable instructions for the rest of the organization. Several common models of strategic management structures are then analyzed, including a CEO-only model, a C-suite collective model, and an SBU model. The presentation critiques a model where the C-suite sits in both strategic and operational roles, arguing this leads to conflicts of interest. It also discusses an "external strategists" model and a problematic "pockets of strategy" model where top management avoids strategic decisions. The presentation concludes by offering

1. Strategic management as group of
human beings
You can’t develop clear strategy without clear definition of
your strategy makers ...
May 2013
By Miroslav Šebek
Mission, vision, future, responsibility,
implementation, values, culture, long-term,
goals, structure, customer preference,
competition, position, SWOT, environment,
changes, financial crisis, credit, focus, advantage
Motto:

2. What is this presentations about ?
There is vast content on strategic management as managerial activity or
process in literature and internet too. On opposite, there is almost no material
on strategic management as organizational body comprising human beings in
these sources. To make matters worse, the rare definitions are as vague as
following one in Wikipedia:
“Strategic management includes the management team and possibly the Board
of Directors and other stakeholders.”
In result, many organizations really don’t know what is their strategic management, let
alone why. They suppose tacitly that the word ‘strategic’ is mere label for top ranks and
‘strategy’ is a substance diffusing from top management to the rest of an organization.
The goal of this presentation is to find exact
borders of strategic management in an
organization and explain in a few examples why
such exact definition matters.

3. Strategy has been defined many times in many ways. Author personally preferes following definition :
Successful strategy – such strategy which ensures attainment of selected
goals or at least survival in real world conditions (=limited resources, limited
information, uncertain future)
Strategic management – such part of an organizational management, which
actually faces decision making on strategy.
Strategy is a pattern of behavior consistent over some period of time.
A few definitions :
Such definition of strategy is very general, usable even for non-thinking entities like
sharks, ants or collective leaderships.

4. Let’s imagine that strategists of some organization just identified following
‘needs’ of their organization’ (8 resource points for full satisfaction of a ‘need’) :
Technologic
Equipment
Human
Resources
Advertising
Campaigns
Research &
Development
Prestigious
address of HQ
Expansion
into new
markets
Competitive
Intelligence
Legal defence
So in this simplified example, they have 8x8=64 ‘need’ points
Unfortunatelly, they have only 42 universal
(next simplifaction !) resource points to
satisfy all their needs above
Note: Neither methods of identifying of the ‘needs’ nor development of necessary strategic metric is subject of this presentation.
What to do ?

5. Supposing they are honest (so they avoid ‘solutions’ like to pretend 42 = 64,
do nothing or hand it over to a consultant) , they may develop e.g. following
strategic solution :
Technologic
Equipment
Human
Resources
Advertising
Campaigns
Research &
Development
Prestigious
address of HQ
Expansion
into new
markets
Competitive
Intelligence
Legal defence
Now the strategists can formulate Clear, Unambiguous, Attainable and Fully
funded instructions for the rest of the organization.
This is the accurate spot, where strategic management ends (and where
operational, tactical or project management begins)

6. Previous example from non-strategic managers’ point of view:
Strategic management to technical director:
Buy or refit your technological equipment up to 7/8 of the best available. You’ll
be provided with sufficient funds for such task. We realize that some competitor
may be at 8/8, however such competitor would have to have weaknesses in
other fields. Don’t try to surpass your goal (7/8) by overloading of your
subordinates. Their morale is very important for us.
Sufficient level of Human Capital will be only 4/8 of the best available. We realize
in our strategy that HR will be our obvious weakness, so we want to exploit it as
a bait for our competitors. Our employees will be notified we don’t expect very
much from them with respect to their low wages. Nonetheless, their morale is
very important for us.
Strategic management to HR director:
If feeling of sanity of strategic management is very important for the rest of an
organization, feeling of its competency does even better work!

7. By the way, business is not military, higher number of divisions doesn’t
guarantee victory.
Organizational
Unit A
Organizational
Unit B
Organizational
Unit C
Organizational
Unit D
Organizational
Unit E
Organizational
Unit F
Organizational
Unit G
Organizational
Unit H
Thinking in categories of organizational units instead
measurable strategic qualities (like the ones at previous slides)
causes many hard to solve problems and is not strategic at all –
it’s mere portfolio management, if any.

8. Once again :
Strategic management is the part of an organization, which transforms
Scarcity of resources, Uncertainty about future and Complexity of
environment into Clear, Unambiguous, Attainable and Fully funded
instructions for the rest of an organization. This is for which is strategic
management responsible.
The rest of an organization carries out the clear and attainable instructions
from strategic management. It also provides strategists with necessary
information and feedback too. This is for which is the rest of an organization
responsible.
Graphics used in this slide will be used in the rest of this presentation : strategists in
green, rest of an organization in blue and red line separating them.
Next slides exploit the definition above to identification of strategic management body
and assessment of its functionality in most common types of corporate structures.

9. 1. CEO is the only strategist
CEO &
Advisors
The rest of an organization
Top officers
In this model of strategic management, CEO
alone or with advisors (which are not
managers) decides on resources allocation
and formulates clear and attainable
instructions for top officers of staff.
Simplicity; clear motivations of
participants
Overloaded CEO
This model is common in SME, start-ups

10. 2a. C-suite is collective strategist
C-suite
The rest of an organization
Top officers
In this model of strategic management, C-
suite is collective strategist deciding on
resources allocation and formulating clear
and attainable instructions for top officers.
C-suite members have no great
organizational structures below them, this is
role of Top officers of staff.
Sufficient ‘brain power’ for
crafting of strategy even in
large organization
High costs of strategic
leadership; C-suite members
may have higher ambitions
than ‘mere’ crafting of
strategy
This is just theoretical model. In reality this
model has mutated into the one on the next
slide...

11. 2b. C-suite sitting on two chairs
CEO
The rest of an organization
CXOs = top
officers
In this model of strategic management, C-
suite tries (unsuccessfully!) to decide on
resources allocation, giving up formulation
of clear and attainable instructions for top
officers of staff, because the officers are the
same members of C-suite.
Feel free to imagine all kinds of problems
(motivational, managerial, strategic, political
etc.) which are introduced by such
dichotomy in role of C-suite members.
Unfortunatelly, this is the most common model
of corporate strategic management. Its frequent
using results in general impression that business
strategy is something vague and blurred.
Could you imagine an executive which would
agree with allocation of modest resources for
HIS/HER department ?!
Could you imagine an executive which would
agree with inferior role of HIS/HER department
in corporate strategy ?!

12. 3. SBU (=Strategic Business Unit) model
Corporate top
management
In this model, corporate top management
has only portfolio management role, maybe
doing some little transfers of money. Real
strategic role lies with SBU’s leaderships,
because they really deals with Scarcity of
resources, Uncertainty of future and
Complexity of their environments.
Robust structure of corporation =
no single strategic mistake can
endanger whole corporation
Little resources at hand for SBU
leadership;
‘Little’ leaders in SBUs, because
you can’t expect great strategist
in such small units
Most famous corporation for using of this model
is GE.
SBU’s
leaderships
SBU 1 SBU 2 SBU 4SBU 3 SBU 5

13. 4. Pockets of strategy
Any top management
In this unwanted model top management
pretends to be strategic, but really does no
decisions on allocation of scarce resources.
Instead usually demands infinite stream of
‘analyses’ and ‘decision materials’. So other
people and groups of people must do
necessary strategic decisions instead of top
management. Some of them are driven by
their own personal responsibility, the others
simply can’t carry out all tasks assigned to
them owing to insufficient resources.
Many companies just before
collapse use this ‘model’.
Obviously, this is not a viable model.
Desperate decisions of uninformed and
insufficiently sourced middle-managers
can’t substitute for missing decisions of
top management for a longer period.

14. 5. External strategists
Any top
management
External strategists may not be necessarily
some consultants. In-house strategic
planning staff acts in the same way. The
essence of this model is in passivity of top
management which only ‘rubber-stamps’
ready-to-use decisions on resources
allocation made by external strategists.
External
strategists
Ready-to-
use strategy
External strategists may be
experienced experts in the field of
corporate strategy
Costs of ‘outsourcing of strategy’ –
experts may be expensive;
Limited motivation of external
strategists to daring decisions and
great changes;
Collection of data for strategists
may be seen as audit-like bothering
by staff;
Corporate top management is
perceived as non-functional
This model is in fact very common
despite strong belief of all top managers
of the world that they are the ‘real’
strategists and some advisors only
support them.

15. It hides itself behind clouds
of ink
Are you still unsure who is real strategist in your
organization? Here is the simplest key:
How the suspect usually behaves
in difficult or unclear situation?
He/she makes decisions
(even painful)
No, this is not strategist but an octopus Yes, he/she may be your strategist

16. All my presentations on strategy and
corporate culture
Personal planning of strategist http://www.slideshare.net/kerimek/personnal-planning-of-
strategist
My glosses to famous Sun Tzu’s The Art of War http://www.slideshare.net/kerimek/the-art-of-war-glosses
Surprising roots of bad organizational culture http://www.slideshare.net/kerimek/roots-of-badculture
Surprising roots of bad organizational culture – shortened version http://www.slideshare.net/kerimek/roots-of-bad-culture-
shortened-version
Strategic management as group of human beings http://www.slideshare.net/kerimek/strategic-management-
as-group-of-human-beings

17. Thank you for your attention!
Looking forward to your feedback, you can use my e-mail
miroslav.sebek@seznam.cz
or send me message at LinkedIn